Glencore’s latest bid for Teck Resources reflects both the creative strategy of a commodities giant that is normally used to getting its way, and the company’s desperation to grow its market share in green future-facing commodities while reducing its reliance on thermal coal in the least painful way possible.
Its latest offer is for Teck’s steelmaking coal business as a standalone unit.
The value of the proposed deal is undisclosed, but it follows the Swiss commodity giant making two near £18bn approaches to merge its minerals and metals business with Teck and spin off their collective coal divisions in April earlier this year.
These hefty bids were knocked back by the Canadian miner’s board – and while Glencore says the offer still stands, it is trying all it can to initiate discussions with Teck’s senior team with a fresh approach.
Teck’s board has its own spin-off plans, without the interference of another company.
However, it has had to shelve its initial ideas and go back to the drawing board after shareholders expressed dissatisfaction with its strategy – with investors already disgruntled about the company’s share structure and the overarching role of the Keevil family in Teck’s operations.
Yet, Teck’s shareholders are not flocking to Glencore’s bid with Teck’s stakeholders divided over its proposition – even after many have been directly approached by chief executive Gary Nagle.
This highlights their growing unease in taking on more long-term carbon intensive assets amid a global push in the commodities sector to set up companies for future facing green metals and minerals such as copper, cobalt, lithium and nickel.
These will be essential for electric vehicles, electrification and renewable technology over the coming decades.
Glencore is also trying win over its own sceptical investors and showcase its green credentials after a third of the company’s investors rejected its climate plan for lacking ambition at its annual general meeting last month – up from less than one-quarter in 2022.
With Glencore’s bid floating and Teck failing to impress, it’s worth keeping a watchful eye on potential bids from other suitors – rumoured to include Japanese group Nippon Steel and billionaire Pierre Lassonde.